Diabetic retinopathy remains a major cause of blindness, and despite cutting edge research in the field, the molecular mechanism of its pathogenesis remains unclear. Our recent research has shown that during early stages of this progressing disease, activation of cytosolic NADPH oxidase 2 (Nox2) generates reactive oxygen species (ROS), and sustained increase in cytosolic ROS damages mitochondrial structure and its DNA, dysregulating the electron transport chain and initiating a vicious cycle of ROS. Furthermore, we have shown that dyslipidemia accelerates Nox2-mediated mitochondrial damage and the development of diabetic retinopathy in a type 2 diabetic animal model. An integral part of the cytosolic core of Nox2 holoenzyme is the small G-protein, Rac1, and diabetes increases Rac1 activity and gene transcripts in retinal microvasculature. Rac1 functional activation is mediated by its binding with the guanine exchange factors (GEFs) and guanine nucleotide dissociation inhibitors (GDIs). Many epigenetic modifications are also favored by diabetic milieu, and these covalent modifications regulate gene expression without altering the DNA sequence. Thus, the central hypothesis of the current application is that covalent modifications of Rac1 modulate its functional and transcriptional activation, and activated Rac1, via Nox2-mediated ROS production, damages the mitochondria, resulting in accelerated apoptosis and the development of diabetic retinopathy. Aim 1 will investigate the molecular mechanism(s) by which hyperglycemia promotes activation of Rac1. Our model predicts that defective prenylation of Rac1 results in its sustained activation and mislocalization, and dynamic DNA methylation- hydroxymethylation of Rac1 promoter facilitates its transcriptional activation. Aim 2 will delineate the mechanism(s) by which gluco/lipotoxicity accelerates the development of diabetic retinopathy, and will investigate the effect of dyslipidemia on functional and transcriptional activation of Rac1. Questions asked under Aim 3 will address the therapeutic potential of regulation of Rac1 activation on inhibition of diabetic retinopathy, and will test novel small molecule inhibitors of GEF and of ceramide biosynthesis. The plan will employ fully optimized molecular biological and pharmacological approaches to assess the effect of diabetes on functional and transcriptional regulation of Rac1 activation in isolated retinal endothelial cells in culture, and in retinal microvessels from (pre-, type 1 and type 2) diabetic rodent models and from human donors with established diabetic retinopathy. Our overall goal is to identify novel regulatory mechanisms involved in the pathogenesis of diabetic retinopathy, specifically at the level of functional and transcriptional regulation of Rac1. The proposal is based on a testable central hypothesis, and these innovative studies carry a significant translational impact as they are expected to identify novel therapeutic targets to inhibit the development and progression of diabetic retinopathy.